Home > Bulgarian Economy > Bulgaria government to save jobs, extends public holiday in May

Bulgaria government to save jobs, extends public holiday in May

The Bulgarian government will try to save 19,000 jobs by offering temporary wage compensation to companies which let their workers go part-time instead of firing them due to the global crisis, it said on Thursday.

The Socialist-led government also decided to freeze 5 percent of monthly expenses for public sector wages to free money for other planned spending, aimed at shoring up the economy from the economic downturn.

The cabinet also extended two public holidays and decided to give the Balkan country six days off on May 1-6 as it said businesses, hit by falling orders, insisted on it.

The European Union newcomer is already feeling the pinch with metals, mining, chemicals and textile companies cutting production and sending hundreds of workers on forced holidays.

Under the plan, the government will extend 7.0 million levs ($4.51 million) to back incomes of workers in manufacturing and services, it said in a statement.

Employees working part-time will receive 120 levs per month for a period of three months.

The move is aimed at preventing massive layoffs and unemployment from topping 8 percent in 2009, versus 6.31 percent in 2008.

But industry officials forecast a double digit jobless rate, saying at least 50,000 workers will be made redundant this year.

Bulgaria’s leading industrial association BIA praised the jobs idea but said the funds were too limited and would cover just one percent of the workforce in the two sectors.

‘The funds are ridiculously small. What is a three-month back-up for a suffering company?’ BIA chairman Bozhidar Danev said.

The government, worried about its plummeting support ahead of parliamentary elections due between June and August, has said it will pour billions of levs (dollars) into the real economy to protect it from the crisis and create new jobs.

But the central bank warned the ruling coalition on Wednesday that its spending spree could cause a budget deficit which Sofia could not afford.

Opposition parties have called the spending plans ‘populist’ and aimed at boosting support for the Socialists.

Some of the planned spending will come from cuts in administrative funds but the government is relying mainly on achieving another hefty fiscal windfall this year of 3 percent of GDP, the same as in 2008.

Economists and opposition parties, however, say the budget surplus could evaporate because declining economic activity and foreign investment mean tax revenues will be hit. Hundreds of companies have shut down production and some face bankruptcies.

(Reporting by Irina Ivanova and Tsvetelia Ilieva; Editing by Jason Neely) ($1=1.552 Leva) Keywords: BULGARIA JOBS/GOVERNMENT

(irina.ivanova@thomsonreuters.com; +359-2-939-97-36; Reuters Messaging: irina.ivanova.reuters.com@reuters.net)

 

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http://www.forbes.com/feeds/afx/2009/02/19/afx6070383.html

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